Norfolk Southern Settlement Leads to More Questions

EAST PALESTINE, Ohio – After Norfolk Southern on Tuesday announced a proposed $600 million settlement in a class-action lawsuit related to the Feb. 3, 2023, train derailment in the village, some residents had more questions than answers.

In a village of about 4,800 where the slogan “EP Lives Matter” can be found on signs, some were angered by just how little it seems Norfolk Southern and the attorneys who came to the agreement think an East Palestine life is worth.

About 14 months after the Norfolk Southern derailment upended lives – temporarily in some cases, while others still have lingering health concerns – the class-action settlement doesn’t sound like enough to some residents. 

The past year has included the much publicized vent and burn three days after the derailment that sent chemicals into the air, temporary relocations of residents, health concerns, shuttered and struggling businesses, heavy truck traffic and the creek-cleaning process as contamination is removed.

“It seems like a slap in the face,” says Kat Smith, owner of Kat’s Krystals.

She questions reports that came out as part of the announcement that people within a 20-mile radius of East Palestine will be eligible for the $600 million, and how little that means each person will receive. One report states the class-action lawsuit includes 500,000 people.

If the money goes to the roughly 400 families displaced in the 1-mile radius of the derailment, before legal fees it would mean $1.5 million per family. If it is split between the roughly 4,800 people living in East Palestine, it would mean $125,000 per person. But if the money is divided between 500,000 people, each person would receive $1,200.

Smith questions who the attorneys talked to before agreeing to such a low amount, which, if divided between so many people, will not begin to cover her losses, she says. She had to throw out her rugs and furniture and was diagnosed shortly after the derailment with chemical bronchitis, and she has had several subsequent bouts with bronchitis this year, which she has never had in her 42 years before the derailment, she says.

“I don’t think it’s a coincidence,” Smith says.

Although Smith and other people she knows signed up for a tort action, which attorneys at the time assured them was different than the other cases being combined into a class-action lawsuit, she now questions if they will all be lumped together.

Reuters reports 31 lawsuits are included in the class-action litigation that is covered by the settlement. Norfolk’s statement states the settlement resolves all claims within a 20-mile radius of the derailment, and for those residents who choose to participate, personal injury claims within a 10-mile radius of the derailment. The agreement in principle has yet to be approved by U.S. District Judge Benita Pearson.

While the agreement does not include the environmental-related lawsuits filed by the federal government and the Ohio attorney general as they attempt to cover their costs for overseeing the Norfolk Southern cleanup efforts, it does reportedly cover the claims of all businesses and residents.

But residents with pending litigation question if they are in or out of the class-action settlement.

Carol Cope, who works in Village Hall, says the law firm she was using reassured her that even though they were not one of the four law firms credited with presenting the case in federal court, her lawsuit was still involved. She lives on East Clark Street, between railroad crossings at James Street and North Pleasant, the latter which is the crossing just west of the derailment. Prior to the derailment, Cope put $50,000 into a house renovation. Even if she sells it, she does not feel she could afford to buy elsewhere what she has here.

She says she also has had health complications since working in Village Hall, which sits above Sulphur Run, one of the creeks the EPA has determined to have suffered contamination. Cope has been seeing doctors for health problems and will need additional tests. Workers continue to clean the creek, which she says continues to fuel her concerns. But she also feels that she has to hide her symptoms because some people want to move on from the derailment and seem to discredit those who continue to have symptoms.

“I don’t know if they can give me enough money to make everything go away, especially for $600 million, sharing it,” Cope says.

Joy Mascher, owner of Flowers Straight from the Heart, says she hopes the money does good for the village, but she is still concerned that people are not coming into East Palestine to shop. She says during the Spring Fling event last week, she didn’t even do $40 in business.

“I’m really surprised they settled so soon though,” Mascher says, noting she thought they would fight it.

In the statement announcing the settlement, Norfolk Southern said the settlement is part of its commitment to East Palestine and the surrounding communities, promises made in March 2023 to address drinking water, home values and health care. The railroad has spent $4.3 million to support upgrades to the drinking water infrastructure and agreed to a home value assurance program to help homeowners if their homes sell below the appraised value.

The settlement, according to Norfolk, will help take care of those with significant health care needs and help qualifying local businesses continue to rebuild and grow. It can be used for medical monitoring, property restoration and diminution, according to the railroad.

The railroad says the agreement does not include or constitute an admission of liability, wrongdoing or fault.

In addition to the settlement, Norfolk has been investing in the village and the surrounding area, including $104 million in community assistance, $2 million in community directed projects and $500,000 for economic development. The railroad is currently renovating the former railroad station. It also purchased and is renovating a building across the street from the East Palestine Memorial Public Library, which will become the Norfolk Southern local headquarters.

Pending the approval of the settlement agreement, class members of the lawsuit will be notified, and the court-appointed class counsel will begin determining who will be receiving allocations from the settlement, with payments expected to begin by the end of 2024.

Pictured at top: A sign is seen at the edge of East Palestine on Jan. 29, 2024. (AP Photo | Carolyn Kaster)

Copyright 2024 The Business Journal, Youngstown, Ohio.